Air France to Submit Bid for Alitalia
Air France-KLM was expected to submit a bid imminently for struggling Alitalia, despite union resistance and an upcoming Italian election that could threaten the deal.
The French-Dutch airline said Monday it would submit its bid to buy a majority stake in the flagship Italian carrier on Friday. The release of details on the bid, which is conditional on Italian union approval, appeared to be delayed until Saturday.
Alitalia SpA shares dropped 5.9 percent Friday to finish at 54 euro cents (84 cents), apparently on expectations that the value of the offer could be lower than initially proposed. Air France-KLM’s shares closed up 1.2 percent at 15.98 euros ($24.87) in a generally weak Paris market.
The bid comes as Italy awaits elections April 13-14 that could bring conservative Silvio Berlusconi back to power, replacing the center-left government that negotiated the Air France-KLM takeover deal. Berlusconi has voiced opposition to downsizing Milan’s Malpensa hub as part of a sale to the Franco-Dutch airline.
Air France-KLM has said it would wait for a new Italian government, which controls Alitalia with a 50 percent stake, to be formed after the elections before finalizing any deal.
Alitalia unions have so far been split on the Air France-KLM offer, with those representing pilots and cabin crew broadly in favor, and those representing the airline’s loss-making ground services business generally against.
Air France-KLM Chairman Jean-Cyril Spinetta is expected to fly to Rome on Wednesday to meet with Alitalia’s labor unions, La Repubblica reported in its Friday Internet edition.
Alitalia’s board was to meet Saturday to examine progress in talks on the sale, as well as short-term financing needs for the cash-strapped airline.
Air France-KLM earlier proposed injecting 750 million euros ($1.15 billion) into Alitalia through a capital increase.
La Repubblica said the bid may come short of the initial offer of 35 euro cents for each Alitalia share, and will leave the Italian government a 2 percent stake in the airline against the 3 percent originally offered. The paper said Alitalia’s work force is expected to be slashed by 4,000 to 13,000 under the offer.